AMD announced the deal is valued at around $5.4B USD: $4.2B in cash and 57M shares of AMD common stock (valued at a little over $18 USD per share as of July 21, 2006) will be used to purchase the ATI in a takeover bid. A
little more than half of the cash to be used from the transaction will come
from a $2.5B USD loan from Morgan Stanley, which was the bank quoted Saturday when the
news of this story first broke. This is in addition to the $5.8B USD the company plans
to invest in Dresden, Germany over the next three years and the $3.5B USD
slated for a new semiconductor facility in Luther Forest, New York.
ATI was a fabless semiconductor company, meaning the company relied completely
on third-party facilities to manufacture its ASICs. Although AMD certainly will
have semiconductor fabrication, the company is already hard-pressed to keep up
with CPU demand. AMD President Dirk Meyer emphasized that AMD will not use its in-house facilities for ATI semiconductors at this time, especially with the TSMC and UMC opportunities that are already available.

AMD's press release also claims that the combined company would have had
approximately $7.3B in sales over the last four quarters and just under 15,000
employees. The new company keeps the AMD headquarters in Sunnyvale,
California, and the previous ATI headquarters will act as a business hub for
part of the company. ATI's previous CEO Dave Orton will act as executive
vice president of the ATI division and report directly to Hector Ruiz and Dirk
Meyer. AMD's press release indicates that ATI will, for now, act as a division
of AMD. In the event the takeover falls through, ATI must pay AMD a termination fee of $162M to cover AMD's initial investments and lendings. AMD CEO Hector Ruiz also confirmed that there will not be any significant layoffs as a result of the takeover.

The merger is more than a small shakeup for the industry. NVIDIA, AMD's
number one supplier of core logic for AMD platforms, is also a direct
competitor of ATI for discrete and integrated graphics. Jaffar Ali was
able to reach NVIDIA's Director of Product PR EMEA, Luciano Alibrandi, who claims
"Our PC strategy is to be the leading innovator of GPU and core logic for
both Intel and AMD platforms. GeForce is the #1 GPU brand. Quadro is the #1
professional and workstation graphics brand. nForce the #1 core logic brand.
And SLI is the #1 multi-GPU brand. They are specifically sought out by end
users of both Intel and AMD processors. Today's announcement only enhances our
strategy." It appears definite that NVIDIA will approach the Intel
market with much more vigor than in the past, though no NVIDIA representatives
would comment on whether or not the merger will result in a scaling back of
NVIDIA AMD components. AMD President Dirk Meyer added "With regard to GPUs: I fully expect ATI's solutions to compete with NVIDIAs on the AMD platform."

Microsoft had already voiced its opinion in the AMD press release when Jim Allchin, Co-President of Microsoft’s Platforms and Services Division, claimed "We're excited by the potential of what AMD and ATI can deliver together to enhance the Windows Vista experience for our customers even further." Since it may take years for the AMD takeover to really kick into effect, it may take some time for customer-ready products to hit store shelves.

The addition of in-house core-logic also strengthens AMD's presence in the
server market. A portfolio manager for AMD, who wishes to remain nameless
for now, told DailyTech "[I] doubt AMD will have the price flexibility to
bundle ATI chipsets (18% gross margin) until they bring the manufacturing
in-house. Available capacity for that is still down the road." The
same manager went on to claim that without total reliance on Broadcom for
server core-logic the company will have much better success securing major
deals for large quantities of server products. All of these products will now be obtained
through the single AMD channel instead of multiple vendors -- the company previously prided itself in diversification of channel solutions until the Dell picked up AMD to provide server products.

"Canadians tend to sell out. Arent they still owned by the United Kingdom and the Queen?"

Are you *trying* to start a flame war? Such a blanket statement shows how incredibly ignorant and uneducated you are. I would have to guess that either you're a teenager, or a very young, and immature adult. What's your next statement, all Mexicans are lazy?

"Are you *trying* to start a flame war? Such a blanket statement shows how incredibly ignorant and uneducated you are. I would have to guess that either you're a teenager, or a very young, and immature adult. What's your next statement, all Mexicans are lazy?"

Dude, it's a joke. laugh and chuckle at yourself, we're talking about a country that has someone else's queen on their money.

And by the way, who's starting the flame war here? You;re the dude with their undies in a bunch.